Social elections: How is a technical business unit determined?

Social elections are approaching, but which companies should organize them? In principle, the obligation applies to companies that usually employ on average at least 50 employees (committee for prevention and protection at work) or 100 employees (works Council). Whether this threshold has been reached, must be assessed at the level of the technical business unit (TBU). In this newsflash, we recall the main principles for determining a TBU.

 

Definition of a TBU

The entities that are considering forming a TBU must have a certain social and economic autonomy. Consequently, the TBU is determined on the basis of social and economic criteria. In case of doubt, social criteria prevail.

The TBU may coincide with the legal entity, but this is not necessarily the case. There are three different possibilities:

1. The TBU coincides with the legal entity;
2. The TBU consists of several legal entities; or
3. There are several TBUs within the same legal entity.

For the sake of completeness, we would also like to add that the concept of a “technical business unit” might be interpreted differently, depending on whether it concerns a committee for prevention and protection at work or a works council, taking into account their respective missions. Abstraction is made thereof in this newsflash.

 

Economic and social criteria

The economic and social criteria are not legally defined. Therefore, it is necessary to refer to case law to interpret them. Below you can find a series of examples of the criteria considered by case law.

1. Economic criteria

The economic criteria serve to determine whether there is economic autonomy. This is determined by the following elements, amongst others:

Examples of criteria	Economic autonomy?
	Yes (i.e. are one single TBU)	No (i.e. other TBU)
Equality of activities with other branches/entities		x Unless each establishment/office has effective freedom to develop its activities
Part of the same economic group		X
Same management/managed by same person or group of persons		X
Separate accounting, legal and administrative services	x
Separate economic policies	x
Merely implementing decisions taken by headquarters		X
Separate marketing	x
Separate pricing policy	x
Centralized promotions		X
Separate commercial management	x
Separate customer service	x

 

2. Social criteria

The social criteria serve to assess whether there is social cohesion. This is determined by the following elements, amongst others:

Examples of criteria	Social cohesion?
	Yes (i.e. are one single TBU)	No (i.e. other TBU)
Sense of belonging, distinct from the sense of belonging in other entities	x
Common buildings/sites	x
Separate organizational charts per entity		X
Common work regulations	x
Common working and wage conditions	x
Common human resources management and policy	x
Different joint committees		X
Joint personnel parties	x
Same payroll office	x

 

Please note:

• None of these criteria are individually decisive. An overall assessment must be made, taking into account all the elements present.
• In case of doubt, the social criteria will prevail, even if the economic criteria would point in the other direction.

 

Legal presumption multiple legal entities

In addition, the law provides for a specific (rebuttable) presumption for multiple legal entities. They shall, until proven otherwise, be presumed to constitute a technical business unit if the following conditions are cumulatively fulfilled:

1. These legal entities

• Either are part of the same economic group or managed by the same person or by persons having an economic link between them
• Either have the same activity or activities that are aligned.

and

2. There are elements indicating social cohesion between these legal entities, such as, in particular, a community of people gathered in the same premises or in premises nearby, a common human resources management, a common human resources policy, work regulations or collective bargaining agreements containing common or similar provisions.

This presumption can only be invoked by employees (or employee organizations). Where evidence is provided of one of the conditions referred to in (1) and evidence of certain elements referred to in (2), the legal entities concerned will be considered as a single technical business unit. The employer can rebut this by proving that the human resources management and policy do not reveal any social criteria.

 

TBU must be established by the employer

On day x-60 of the election calendar, the employer is obliged to inform the existing employee representative bodies or employees about the composition of the TBUs that exist at that time in the company according to the employer. Then, between day x-60 and x-35, there will be a consultation on the number of technical business units as well as their description. On day x-35 of the election calendar, there is an obligation for the employer to announce its decision on the number of TBUs for which employee representative bodies are to be established (including their description).

Representative employee organizations and employees who do not agree with the employer's decision have until day x-28 to appeal to the Employment Tribunal. It will rule at first and last instance on the employer's decision.

The labor court does not need to limit itself to the situation on day x-35 but may also take into account elements that existed at the time the appeal was filed.

 

Contact us

It is not always easy to determine the TBU correctly. Therefore, it is important to analyze it timely and thoroughly to avoid discussions. We are happy to assist your company in case you have any questions regarding the concept of technical business unit and/or the social elections.

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